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Bangalore District Court
M/S. Shankara Building Product Ltd vs M/S. Angel Ceramics on 12 June, 2025
KABC0C0237012024
IN THE COURT OF XIV ADDL.CHIEF JUDICIAL
MAGISTRATE, MAYOHALL UNIT, BENGALURU
Dated this the 12th day of June, 2025
Present : SANTHOSH S.KUNDER, B.A.,LLM,
XIV Addl.C.J.M., Bengaluru
JUDGMENT UNDER SECTION 355 of Cr.P.C
C.C.No. 56303/2024
Complainant M/s. Shankara Building Products Ltd.,
Regd. Office: G-2, Farah Winsford,
No.133, Infantry Road,
Bengaluru-560001.
Rep. by its Officer - HR & Administration
& PA Holder Mr.M.V.Chandrasekhar,
S/o Late. M.S. Venkatramu,
Aged about 51 years.
(By Sri.B.Keshava Murthy, Advocate)
V/s
Accused M/s. Angel Ceramics,
# 11 574, Panchayath Junction,
Muppathadam, Ernakulam-683110.
Rep. by its Proprietor &
Authorized Signatory,
Mr.Jibin Thekkepoyil,
Also at:
Mr.Jibin Thekkepoyil,
S/o Mr.Balaraman.T.,
Thekkepoyil, Manassery, Mukkam,
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KABC0C0237012024
Thazhecode, Kozhilkode,
Kerala-673602.
(By SKY Associates, Advocate)
Offence U/s 138 of Negotiable Instruments Act.
Plea of the Pleaded not guilty
accused
Final Order Accused is held guilty & convicted
This complaint is filed under Section 200 of Cr.P.C,
for the offence punishable under Sections 138, 141 and
142 of the Negotiable Instruments Act.
2. Complaint averments in brief:
2.1. Complainant is a limited company, registered
under the provisions of the Companies Act. It is a leading
and largest manufacturer and distributor for wide range of
Pipes and Tubes, M.S. Sheets, M.S.Plate, M.S.Angles,
Channel, Tiles and other allied building products.
2.2. Accused is Proprietor and authorized signatory
of M/s Angel Ceramics. He has purchased the materials
from the complainant as per his requirements and agreed
to pay delay charges @ 24 % p.a., in the event of his failure
to pay the agreed amount.
2.3. Towards supply made by the complainant to the
accused, he is in due of ₹69,69,723/- and towards
discharge of said liability, he has issued cheque bearing
No.000003 dated 12.02.2024 for ₹69,59,723/-, drawn on
HDFC Bank, South Kalamassery Branch, Kochi, in favour
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of the complainant, with a promise that the cheque would
be honoured. The complainant has presented the cheque
through its banker, viz., IDFC First Bank Ltd., Residency
road branch, Bengaluru. But, it was returned dishonored
with endorsement 'funds insufficient', vide Banker's memo
dated 14.02.2024. Thereafter, the complainant has issued
a legal notice dated 29.02.2024 through RPAD calling upon
the accused to make payment of the cheque amount.
Notice sent to the office address of the accused has not
been claimed by him, whereas, the notice sent to the other
address, has not returned. Accused has not paid the
cheque amount. Therefore, this complaint is filed.
3. This court took cognizance of the offence
punishable under Section 138 of N.I.Act. Authorized
signatory of the complainant was examined on oath. As
prima facie case made out, criminal case was registered
and accused was summoned.
4. Pursuant to the summons, Proprietor of
accused has appeared before the court and got enlarged on
bail. After compliance of Sec.207 of Cr.P.C, this court
recorded his plea. He has pleaded not guilty and claimed to
be tried.
5. Sworn statement of authorized signatory of the
complainant is treated as evidence for complainant.
Documents at Ex.P-1 to 11 marked for the complainant.
6 After closure of complainant's evidence,
Proprietor of the accused was examined under Section 313
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of Cr.P.C. He has denied the incriminating evidence.
Accused has neither cross-examined PW-1 nor led defence
evidence.
7. Heard advocate for complainant. Defence
counsel has not turned up to address argument.
8. I have perused the records.
9. Points for consideration:
1.Whether the complainant has proved
that accused has issued cheque
bearing No.000003 dated 12.02.2024
for ₹69,59,723/-, drawn on HDFC
Bank, South Kalamassery branch,
Kochi, in favour of the complainant
towards discharge legally recoverable
debt/liability and the said cheque was
dishonored for the reason 'funds
insufficient' and in spite of deemed
service of statutory notice dated
29.02.2024, he has failed to pay the
amount covered under the cheque and
thereby committed the offence
punishable under Section 138 of
N.I.Act?
2. What order?
10. The above points are answered as under:-
Point No.1 : In the Affirmative.
Point No.2 : As per final order for the following:
REASONS
11. Point No.1: The case of the complainant is that,
it had supplied materials to the accused and towards
payment of outstanding, accused has drawn the subject
cheque, which, on presentation, dishonored for the reason
'funds insufficient' and that in spite of service of statutory
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demand notice, he has failed to pay the dishonored cheque
amount to the complainant.
12. In order to substantiate the case, the
complainant has examined its PA Holder as PW-1. As many
as 11 documents marked through him. Ex.P-1 is certified
copy of board resolution dated 30.11.2020; Ex.P2 is
certified copy of power of attorney; Ex.P3 is cheque; Ex.P.4
is bank endorsement; Ex.P-5 is copy of demand notice
dated 29.02.2024; Ex.P.6 & 7 are postal receipts; Ex.P-8 is
unserved postal cover; Ex.P.9 & 10 are postal track
consignment reports; and Ex.P11 is ledger account of
accused firm maintained by the complainant.
13. As noted above, entire case of the complainant
has gone unchallenged and testimony of PW-1 remained
unrebutted, as the accused has not chosen to cross-
examine PW-1 and not led defence evidence.
14. It is seen from ledger account of the accused for
the period 01.04.2023 to 23.02.2024, marked at Ex.P11
that the complainant had supplied materials to the
accused under various invoices and the accused made
certain payments. It is also forthcoming that the accused
has outstanding of ₹69,59,722.92. Entries in Ex.P11 has
not been disputed by the accused. This document proves
the existing debt as on the date of cheque at Ex.P3. It
appears from Ex.P3 that it was drawn from the bank
account of accused firm and its Proprietor-Jibin is the
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signatory to the cheque. It is pertinent to note that the
signature on the cheque is not in dispute.
15. Section 138 of the Act provides that a drawer of
a cheque is deemed to have committed the offence, if the
following ingredients are fulfilled:
(i) A cheque drawn for the payment of any
amount of money to another person;
(ii) The cheque is drawn for the discharge of
the "whole or part" of any debt or other
liability. "Debt or other liability" means legally
enforceable debt or other liability; and
(iii) The cheque is returned by the bank unpaid
because of insufficient funds.
16. However, unless the stipulations in the proviso
are fulfilled, the offence is not deemed to be committed.
The conditions in the proviso are as follows:
(i) The cheque must be presented in the bank
within six months from the date on which it
was drawn or within the period of its validity;
(ii) The holder of the cheque must make a
demand for the payment of the "said amount of
money" by giving a notice in writing to the
drawer of the cheque within thirty days from
the receipt of the notice from the bank that the
cheque was returned dishonoured; and
(iii) The holder of the cheque fails to make the
payment of the "said amount of money" within
fifteen days from the receipt of the notice.
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17. It is also apt to note that a negotiable instrument
including a cheque carries presumptions in terms of
Section 118(a) and Section 139 of the N.I.Act.
(i) Section 118 of the N.I.Act provides;
Presumptions as to negotiable
instruments; Until the contrary is
proved, the following presumptions
shall be made;
(a) of consideration that every
negotiable instrument was made or
drawn for consideration, and that every
such instrument, when it has been
accepted, indorsed negotiated or
transferred was accepted, indorsed,
negotiated or transferred for
consideration:"
(ii) Section 139 of the N.I.Act provides
as follows:
'Presumption in favour of holder it shall
be presumed, unless the contrary is
proved, that the holder of a cheque
received the cheque of the nature
referred to in Section 138 for the
discharge, in whole or in part, of any
debt or other liability".
18. Thus, the combined effect of Section 118(a) and
Section 139 of N.I.Act raises a presumption in favour of the
holder of the cheque that he has received the same for
discharge, in whole or in part of any debt or other liability.
19. In Krishna Janadhan Bhat V/s Dattatraya
G.Hegde; (2008) 4 SCC 54, Hon'ble Supreme Court held
that:-
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"The presumption mandated by Section 139
includes a presumption that there exists a
legally enforceable debt or liability. This is of
course in the nature of a rebuttable
presumption and it is open to the accused to
raise a defence wherein the existence of a
legally enforceable debt or liability can be
contested."
20. In Rangappa V/s Sri.Mohan; (2010) 11 SCC
441, Hon'ble Supreme Court held that, ordinarily in
cheque bouncing cases, what the courts have to consider is
whether the ingredients of the offence enumerated in
Section 138 of the Act have been met and if so, whether the
accused was able to rebut the statutory presumption
contemplated by Section 139 of the Act.
21. From the ratio laid down in the above
judgments, it can be gathered that the presumption
mandated by Section 139 of NI Act includes a presumption
that there exist a legally enforceable debt or liability. Of
course, this presumption is rebuttal by the accused by
making out a probable defence.
22. In the present case, as noted above, signature
of the accused on the cheque is not in dispute. Once
signature of an accused on the cheque is proved or
established, then 'reverse onus' clauses become operative.
In such a situation, the burden shifts upon the accused to
discharge the presumption imposed upon him. This
observation is made by Hon'ble Supreme Court in
Kalamani Tex and Anr. V/s Balasubramanian, 2021 SCC
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Online SC 75. Thus, burden is on the accused to
discharge the mandatory presumption under Section
118(a) and 139 of NI Act. But, hardly any attempt made by
the accused to discharge the statutory burden.
23. It is evident from the documents placed on
record that the cheque was presented for encashment
within its validity period and it was dishonored for the
reason 'funds insufficient', vide cheque return memo at
Ex.P4 dated 14.02.2024. There afterwords, the
complainant caused a demand notice dated 29.02.2024, a
copy of which is at Ex.P5, calling upon the accused to pay
the dishonored cheque amount within a period of 15 days.
It is evident from Exs.P6, P7, P9 and P10 that the notices
were sent through RPAD and Exs.P8 and P10 indicate that
the accused has not claimed the registered post. Therefore,
it is deemed that the notice served on the accused. The
accused has not complied with the demand made in the
legal notice. Therefore, by statutory fiction, offence under
Section 138 of N.I.Act is deemed to have been committed.
Accused has failed to rebut the statutory presumptions
under Section 118 (a) and Section 139 of N.I.Act. Therefore,
this court holds that the complainant has proved that the
accused has committed the offence punishable under
Section 138 of N.I.Act. Accordingly, I answer Point No.1 in
the Affirmative.
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24. Point No.2:-Punishment prescribed for the
offence under Section 138 of Negotiable Instruments Act is
imprisonment for a period which may extend to two years
or with fine which may extend to twice the amount of the
cheque or with both. Considering the facts and
circumstances of this case, year of the transaction and the
rate of interest stipulated under Section 80 of NI Act, this
court is of the considered view that it is just and desirable
to impose fine of ₹85,00,000/- and out of the said amount,
it is just and proper to award a sum of ₹84,90,000/- as
compensation to the complainant as provided under
Section 357(1) (b) of Cr.P.C and the remaining sum of
₹10,000/- shall go to State. In view of the findings
recorded above, I proceed to pass the following:
ORDER
Acting under Section 255(2) of Cr.P.C.,
accused is held guilty and convicted for the
offence punishable under Section 138 of
Negotiable Instruments Act.
Accused is sentenced to pay a fine of
₹85,00,000/-. In default to pay fine, accused
shall undergo simple imprisonment for a
period of six months.
Out of the realized fine amount, a sum of
₹84,90,000/- is ordered to be paid to the
complainant as compensation and the
remaining sum of ₹10,000/- shall be remitted
to State.
Bail bonds executed by accused shall
stands cancelled.
11 CC.No.56303/2024
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Office to supply a free copy of this judgment
to accused.
(Dictated to the Stenographer, transcript computerized by her, revised
corrected and then pronounced by me in the open Court on this the 12 th
day of June, 2025)
( SANTHOSH S.KUNDER )
XIV Addl. C.J.M., Bengaluru.
ANNEXURES
List of witness examined for the Complainant:
PW.1 Chandrasekhar.M.V
List of documents marked for the Complainant:
Ex.P.1 Certified copy of board resolution dated
30.11.2020
Ex.P.2 Certified copy of power of attorney
Ex.P.3 Cheque
Ex.P.3(a) Signature of the accused
Ex.P.4 Bank endorsement
Ex.P.5 Copy of legal notice
Ex.P.6 & 7 Postal receipts
Ex.P.8 Unserved postal cover
Ex.P.9 & 10 Postal track consignment reports
Ex.P.11 Ledger account of accused firm maintained by
complainantList of witness examined for the defense Nil
List of documents marked for the defense NilXIV Addl.C.J.M., Bengaluru.
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